The U.S. Economic Development Administration regional director hasn't decided yet whether to adopt the findings of an audit report asking Nye County to return a $3 million EDA grant awarded in 1999.

But one of the findings of the Office of Inspector General's audit, to list Nye County as a high risk recipient, will cause federal agencies to give a more critical review to Nye County grant applications in the future, EDA officials said.

The OIG audit involves three different grants wrapped into one: a $1.4 million grant for the Amargosa Valley Science and Technology Park in Lathrop Wells that was never completed; $1.3 million for the Pahrump High Technology Center now the Great Basin college building and $260,000 in planning and management funds.

A. Len Smith, EDA regional director in Seattle, said he has yet to meet with representatives of the Office of Inspector General about the audit but has reviewed the findings.

"They make their audit findings, they make recommendations to us. Generally we meet with them and discuss these things with them. That action has not happened yet but we take their recommendations very seriously," Smith said.

Nye County submitted its comments last July after receiving the draft report of the OIG audit. But the final audit released in September mostly upheld the draft recommendations.

Assistant Nye County Manager Pam Webster said while the inspector general's office recommends the county return the $3 million grant, the audit also talks about the EDA doing an appraisal of what was completed. Webster noted the building originally called the High Tech Center when it was constructed in 2001, now used by Great Basin College, was a major improvement completed with the money.

"Portions of the three points were not completed. We admitted that as well," Webster said. "They asked to have the appraisal done, then evaluate what is due back. It's going to be something substantially less than $3 million."

Nye County, in its response to the draft audit last July, estimated it owed $222,405 to the federal government for parts of the grant not completed. Webster admitted the inspector general's auditors didn't accept the county's evaluation.

While Webster was confident some of the immediate funding impacts could be reduced, there may be long term consequences. Another finding by the inspector general recommends in the event Nye County applies for future EDA financial assistance, the county be declared a high risk recipient, requiring the agency to take the appropriate steps under the Code of Federal Regulations.

"I would say that any proposal would be scrutinized with a fine tooth comb," EDA representative Rick Tremblay said, who represents the Nevada and Idaho region.

Nye County was previously cited by the Office of Inspector General in 2003 and 2004 for using $720,067 in U.S. Department of Energy oversight money for Yucca Mountain to fund staff working on economic development activities.

"Any proposals submitted to probably EDA, but possibly other government agencies, there will probably be more extensive due diligence to make sure that the justification for the project is valid, the qualification criteria are met and the scope of work is going to be completed within budget and on time," Tremblay said.

The EDA looks for projects that will attract private investment and provide good paying jobs, Tremblay said. That includes ensuring whether the county actually builds a science and technology park and provides 160 near term and 460 long term jobs, as specified in Nye County's grant proposal, he said.

"That project is eight years old. In my understanding it's created zero jobs and there hasn't been much of an effort to do anything about it," Tremblay said. "I can tell you right now that if I did a proposal for Nye County they'll look over it with a fine tooth comb. Based on the IG's report they're going to make sure every word in that proposal is true."

Tremblay couldn't detail what other EDA grants Nye County received in the past, or any pending grants. He said Tonopah received EDA grants, like the downtown revitalization program and the Brownfields grant. Back in 1999, during a meeting at the Mountain View Casino, U.S. Sen. Harry Reid, D.-Nev., announced this $3 million grant was the biggest grant awarded by the EDA in Nevada.

"I imagine other agencies might be looking at things under a microscope also," Tremblay said. "I would put anything I had from Nye County under a magnifying glass because I wouldn't want anything like this on my watch."

Smith, the EDA regional director, said the high risk status "is an alert for federal agencies and our agency in particular if we are going to look at making a grant there we have to be made aware there is an existing problem and we need to check on the local capacity to actually handle the grant."

The audit recommends the county identify what's needed to provide water to complete the science and technology park. It also asks the county to develop a sound plan to market the park.

"We have a couple interested parties that are looking at putting an anchor business in there," Webster said.

The science and technology working group will meet at the Nye County administration building Dec. 11 to discuss the project.

"We do absolutely want to complete it," Webster said. "We're not going to wipe out the audit report but I think we'll be able to take some corrective actions for EDA officials."